Industrial

Clusters
Snapshot
• Number 2 in West Africa for industrial cluster development according to the “World
Competitiveness Report 2015”
• The top cluster destinations in Nigeria include: Nnewi (Automotive), Otigba
(Technology), Onitsha (Plastics), and Kano (Leather)

The Nigeria Industrial Revolution Plan (NIRP) was designed to facilitate the development
of industrial cities, parks, and clusters while focusing on making hard infrastructure
available within these industrial zones. The current administration is fully committed to
implementing the NIRP.

The Nnewi automotive parts industrial cluster

The Nnewi Automotive Parts industrial cluster is a huge success story in Nigeria. This
industrial cluster exports automotive parts to countries in the West African sub-region as
well as other international destinations. Its key critical success factors include active
participation of private industry associations such as Nnewi Chamber of Commerce,
Industry, Mines and Agriculture and the Nigerian Association of Small-scale Industries, a
social – cultural milieu characterized by competitiveness, high entrepreneurial spirit as
well as investment in training and capacity to imitate and assimilate foreign technology.
Above all, the Nnewi cluster made an independent effort to provide the necessary
infrastructural support when the state failed to do so.

Since the mid-1970s, local traders in Nnewi have transformed themselves into
manufacturers of automobile parts through close linkages to technology suppliers in
Taiwan Province of China. Seventeen firms, ranging in size from enterprises with 40
employees to those with 250, supply Nigeria and other West African markets with switch
gears, roller chains for engines, auto tubes, batteries, engine seats, shock absorbers,
foot rests and gaskets for motorcycles, as well as other parts. Most of these firms have
the design capability to modify products and adapt the production process to the local
market. Firms in Nnewi grew despite major infrastructural and credit constraints.
Electricity, for example, was only supplied through private generators, water was
provided through the company’s boreholes, telephone service was poor and tariffs high,
land was expensive and scarce, and banks were reluctant to extend the level of credit
offered to companies with high inventory costs. Despite all these limitations, Nnewi firms
succeeded in innovating, growing and exporting to neighboring.
Much of this success was due to the acquisition of skills by workers mainly through
learning by doing, especially during equipment installation and test run, and through
inter-firm linkages with foreign technology suppliers, notably those from Taiwan.

Nnewi- the second largest city in Anambra State (South East Nigeria) has positioned
itself as the Japan of Africa (manufacturing hub). It is home to many indigenous
manufacturing companies: Ibeto Group, Cutix Plc, Uru Industries Ltd, Omata Holdings,
Innoson Group, Tomy Tomy Group, Chicason Group, and lots more.

The Otigba computer village

The Otigba Computer Village was developed in 1995, and covers an area of some
325km2 in Ikeja, Lagos and provides for the sale, service and repair of ICT products and


components, particularly to the Lagos industrial base. Increasingly the Otigba cluster is
meeting West African market demand with some 392 SMEs employing more than 3,000
workers. The cluster development has been characterized by significant inter-firm co-
operation and joint action.
Co-operation has been particularly noticeable in dealing with government’s treatment of
the cluster, where the Computer and Allied Products Association of Nigeria (CAPDAN)
has been very active. This has resulted in a supportive government that has, for
instance, facilitated property access and rental and licensing and refrained from heavy-
handed inspection and licensing practices. Other areas of significant cooperation relate
to technology and market support, security, and infrastructure maintenance.

A key factor at play in this cluster appears to be the relatively very high educational level
of the workforce. Given the cluster’s dependence on imported inputs (63.5 per cent), the
quality of trade facilitation services is an important determinant of cluster
competitiveness.

Onitsha plastic cluster

Onitsha is a very dynamic city and has the highest concentration of manufacturers in
Eastern Nigeria with products ranging from pharmaceuticals to paints, and from plastics
to chemicals. It attracts trading partners from the rest of the country and different parts of
the West African sub-region. The plastic cluster in Onitsha is known as the Osakwe
industrial cluster, it is situated at Awada layout in Onitsha and has about 75 businesses
employing over 1,800 workers. The industries are managed by the Industrial Economy
Development Agency, a local group that provides planning, research & development,
infrastructure, security, and training to members of the cluster. The industries cover a
wide range of products: plastic film extrusion, plastic pipe extrusion, plastic injection,
plastic blow molding, polythene bag making, and plastic waste recycling. There are three
service workshops, and a machine development and building company.

Free Trade Zones

A free trade zone is an area within which goods may be landed, handled, manufactured
or reconfigured, and re-exported without the intervention of the customs authorities. Only
when the goods are moved to consumers within the country in which the zone is located
do they become subject to the prevailing customs duties.
The Nigerian Export Processing Zones Authority is the agency responsible for promoting
and facilitation local and international investments into license free zones in Nigeria.

Free Trade Zones in Nigeria

Name Location Developer Land Status
Size (ha)
Calabar Free Trade Cross River Federal 220 Operational
Zone (CFTZ) Government
Kano Free Trade Zone Kano Federal 463 Operational
(KFTZ) Government
Tinapa Free Zone & Cross River PPP 265 Operational
Resort
Snake Island Lagos Nigerdock Plc. 59.42 Operational


International Free
Zone
Maigatari Border Free Jigawa State Government 214 Operational
Zone
Ladol Logistics Free Lagos GRML n/a Operational
Zone
Airline Services EPZ Lagos Private n/a Operational
Sebore Farms EPZ Adamawa Private 2,000 Operational
Ogun Guandong FTZ Ogun PPP 10,000 Operational
Lekki Free Zone Lagos State Government n/a Operational
Abuja Tech Village FZ FCT Abuja FCT 702 Under
construction
Ibom Science & Tech Akwa Ibom State Government 122.14 Operational
FZ
Lagos Free Trade Lagos Eurochem 218 Operational
Zone Technology
Olokola Free Trade Ondo & PPP 10,500 Operational
Zone Ogun
Living Spring Free Osun State Government 1,607.86 Under
Zone construction
Badagary Creek Lagos Kaztec Engineering 531 Under
Integrated Park construction
Ogindigbe Gas Delta Alpha GRIP 2,506.03 Under
Revolution Industrial Development Co. construction
Park (GRIP)
Nigeria Aviation Lagos NAHCO 10 Under
Handing Co. (NAHCO) construction
Nigeria International Lagos Eko Atlantic FZ Ltd 1,000 Under
Commerce City construction
Ogogoro Industrial Lagos Digisteel 52 Under
Park construction
Ondo Industrial City Ondo State Government 2,771.2 Under
construction
Source: Nigeria Export processing Zones Authority